Red Robin Gourmet Burgers Inc.
), is set to unveil a restaurant in Baltimore, MD. Positioned at
the Inner Harbor area of downtown Baltimore near Canton Crossing,
the outlet will beef up the restaurateur's domestic
The value offerings and contemporary ambience of this unit is
expected to boost sales of Red Robin, which is famous for its
Royal Red Robin Burger and signature Red Robin's Freckled
Red Robin currently operates as many as 482 units in the U.S.
and Canada. With the resurgence of consumer confidence,
management has accelerated its unit openings and plans to unveil
another 20 units in 2013.
Red Robin which was focusing on expanding business in the
California markets is now venturing into several under-penetrated
locations in the U.S. to avoid market saturation. Among the
under-served markets, Maryland needs a special mention where the
company has only 15 units as compared with 70 units in
As per the National Restaurant Association, the restaurant
industry contributes considerably toward the flourishing economy
of Maryland, one of the most populous and wealthiest states in
U.S. Marylanders' inclination toward eating out frequently is
favorable for the sector's growth, which, we believe, has caught
the attention of Red Robin. According to the research
organization, Maryland's restaurants are expected to earn $10.3
billion in sales in 2013.
Though the company's effort to expand beyond its barriers is
appreciable, we are concerned about the higher pre-opening costs
that Red Robin will witness following its entry into under-served
markets compared with matured trade areas, in which the company
already has support infrastructure. This factor may hurt the
company's profitability in the near term.
Other Stocks to Consider
Other players in the restaurant industry that look attractive
at the current levels include
AFC Enterprises Inc.
Cracker Barrel Old Country Store, Inc.
CEC Entertainment Inc.
). All these restaurateurs carry a Zacks Rank #2 (Buy).
AFC ENTERPRISES (AFCE): Free Stock Analysis
CRACKER BARREL (CBRL): Free Stock Analysis
CEC ENTERTANMNT (CEC): Free Stock Analysis
RED ROBIN GOURM (RRGB): Free Stock Analysis
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